Chapter XII ASSESSMENT

CHAPTER—XII . ASSESSMENT Every registeredperson shall -self<assess the taxes payable underthisAct and furnish {£63m for each tax period as (1) Subject tothe provisions of sub-section3§(2), where the I (2) (3) specified undersection39. taxable person is unableto determine the value of goods . orservicesor both or determinetherateoftax applicable ' thereto, he mayrequest the proper officer111 writing giving reasonsfor payment oftaxona provisiOnal basis and the proper officer shall pass an order, withina period not laterthan ninetydays fromthedate of receipt of such request,allowingpayment of tax on provisional basis at such rate oronsuchvalueas may be specified by The payment oftax6n provisionalbasismay be allowed, ifthe taxable person executes abond in such formas may be prescribed, andwith such "surety or security asthe - proper officer may deem fit. binding thetaxable person for payment ofthedifference between theamount of ' taxas may be finally assessedand the amount of tax prow‘sionally assessed. 'ihe properofiicer shall, within a period not exceeding six monthsfrom thedateofthecommunicationofthe order issued under sub-section ( 1), pass thefinalassessment orderafter taking intoaccountsuchinformation as may be required for finalizing theassessment: Providedthat the‘periodspecified' in thissub-section may, on sufficient cause being shownandforreasonsto berecorded in writing, beextended by the Joint Commissioner or Additional Commissioner fora further period not exceeding six months and by the Commissionerfor such further period not exceeding four years. (4) The registered person shallbe liable to pay intereston any tax payable on the supply of goods or services both under provisional assessment butnot paid onthe due date‘ specified undersub-section (7) of section39 or the rulesmade thereunder, attherate specified under sub- section (1) ofsection 50, from thefirst day afterthedue date of payment of taxin respect of the said supply Of goods or services or bothtillthedateofactual payment. whether such amount is paid before oraftertheissuance oforder for finalassessment. Self-Assessment.

62. (5) (1) (2) , (3) (1) (2) Where the registered person isentitledtoa refund consequent to the orderforfinal assessmentunder sub- section (3), subject to the provisions of sub-section (8) ofsection54, interestshallbepaidonsuchrefimdas provided in section56. The proper officer may scrutinizethereturn and related particulars furnished by the registeredperson to verify thecorrectness ofthe returnand informhim ofthe _ discrepancies noticed, if any, in such manneras may be prescribed and seek his explanation thereto. Incasetheexplamflonisfoundacceptabletheregistered person shallbe informed accordingly and nofurther ‘ actionshallbetakeninthisregard.‘ ' In caseno satisfactoryexplanationis firrnishedwithin aperiodofthirtydaysofbeinginformedbytheproper officerorsuchfirrtherperiodasmaybepermittedby himorwhaethemgistaedpersonafieraccepting thedisaepandmfailstotakethecorrectivemeasure inhisreturn forthe'rnonth in whichthediscrepancy is accepted, the proper oilicer may initiate appropriate action including thoseunder section or section660r section67, orproceedtodeterminethetaxandother " duesundersection73orsection74. "Notwithstanding anything to the contrary contained in section73or section 74, where a registeredperson fails tofurnishthe return under section39orsection 45, even after the service ofa noticeundersection 46, the proper officer may proceed to assessthe tax'liability of the said ‘ person tothebestof his judgment taking intoaccount all the relevant material whichisavailableorwhichhe has gathered and issue an assessment order within a period offive years from the date specified undersection for finishing of theannual returnfor thefinancial ’ year to whichthetax nOt paid relates. Wherethe registered person furnishesavalidreturn within thirtydays oftheservice ofthe assessmentorder runder sub- section (1), the said assessmentorder shall " be deemedtohave been withdrawn but theliability for payment ofinterest under sub—section (1) of section orfor payment of late fee under section shallcontinue. Scrutinyofreturns Assessment ofnon-filers ofreturns.

63. Notwithstanding anything to the contrary contained in section or section 74,where a taxable person failsto obtain registration even though liable todo so or whose registration ,, has been cancelled under Subsection-(2) of section but whowasliable topaytax, theprop’er officermayproceedto assess’the tax liability ofsuch taxable person to the best ofhis judgement forthe relevant tax periods and issue an assessment order within a period of five years from the date specified ‘ under section-H for fumishing'ofthe annual return forthe financial year to which the tax not paid relates: ‘ Provided that nosuch assessment order shall be passed withoutgivingthe personanopportunitynfbeingheard. ' 64. (l) The proper officer may. on any evidence showing a . taxhabihtyofapersoncomingtohisnofioewiththe previous permission of Additional Commissioner or Joint Commissioner, proceed to assess.the tax liability of such person to protect the interest of revenue and issue an assessment order, ifhe has suflicient grounds tobelievefliatanydelayindoingsomayadverselyfiafect the interestof revenue: _ - ‘ ’ . Providedthat wiierethe taxable person to whorn the liability pertains is not ascertainableand such liabilitypertains to’supply of goods, the person in chargeof such goods shall be deemed tobe other amount due under this section. the taxable person liable tobe assessed and liableto pay taxand any (2) On an application made by the taxable person within thirty days frbm the dateof receipt. of order passed under sub-section (1) oron his own motion, if the Additional Commissioner or Joint Commissioner considers that 'smhorderisermneoushemaywithdrawsuchorder, and follow the procedure-laiddown in section73 or section 74. ' " Assessmentof unnglsteredpersons. Sumnnryusessment'in

65. "(1') (2) (3) ,' (4) CHAPTER XIII AUDIT The Commissioner or any oflicer authorisedby him, bywayofagengaloraspeaficorder mayundertake audit of any registered person for such period. at such frequencyandinsuchmannerasmaybeprescribed. TheofliCcrs referred to insub-section (1) may conduct audit atthe place of business of the registered persoii'or intheir office. Theregistcredpersonshaflbeinfomedhywayofanofice notless thanfifteen working daysprior tothe conduct of ~ auditinsuchmannerasmaybeprescribed. ' “The audit under sub-section (1) shallbe completed within a period ofthree months from the date of continencernent ofthe audit: Provrded thatwhere theCommissioner issatisfied that audit in respect of such registered person cannot be completed within three months, he may, forthe remnstobe recorded in writing, extend the period by a further period not exceeding six months. Expldndfiom— For the purposes ofthis sub-section, the expression j “commencement of audit” shallmean the dateonwhich the records and other documents, called for by the tax authorities, aremade available by the registered person orthe actualinstitution of auditat the place of business whichever' later. (5) (6) (7) During the course of audit, theauthorised officer may require the registered-person;- (i) to afi'ord him the necessary facility to verify the books of accountor otherdocuments as he may require; (ii) tofurnish suchinformation ashe mayrequire andrenderassistance for timelycompletion of the audit. 0n conclusion of audit, the proper oficer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations andthereasons forsuch findings. Where theauditconducted under sub-section (1) results in detection of tax not paid orshort paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper oflicer may initiateaction under section 73or section 74. ‘ Audit by tax mini-id

66. (1) Ifat anystage of. scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rankofAssistant Commissioner, having regard to the natureand complexitycf thecaseandtheinterest of revenue, is of the opinion thatthe value has not been correctly declared or thecreditavailed is notwithin the normal limits, he may, with the priorapproval of the Commissioner, directsuch registeredpersonby a communication in writing to get hisrecords including books of account examinedand audited by achartered accountant oracost accountant as may benominated by ‘ the Commissioner: . (2) The charteredaccountant or costaccountant . so nominated shall, within the period of ninety days, submit a report of suchaudit duly signed andcertified by himto the saidAssistantCommissioner mentioning «thereinsuchother particulars as may be Specified: Provided that theAssistant Commissioner may, on an application made tohiminthisbehalf by the registered person or thechartered accountant or cost accountant or for any material and sufficient reason, extend thesaid period by a further period of ninety days. (3) The provisions of sub-section (1) shall have effect notwithstanding that theaccounts ofthe registered person havebeen auditedunder any other provisions of this Act or any other lawforthe time being in force. (4) The registeredperson shallbe given an opportunity of being heardin respect of any material gathered on the basisof special audit undersub—section (1) whichis proposed to be usedin any proceedings against him .under this Act ortherules made thereunder. (5) The expenses oftheexaminationand auditofrecords under subsection (1), including the remuneration of such charteredaccountant or cost accountant. shallbe determined and paidby the Commissioner and such determinationshall be final. . (6)- Wherethe special auditconductedunder sub-section (1) resultsindetection of tax not paid orshort paid or erroneously refunded, or input tax credit wrongly availedor utilised, the proper officer may initiateaction undersection 73orsection 74. Special audit.

. CHAPTER XIV INSPEQl'ION, SEARCH, smz:mm AND ARRESf d7. (1) Where·the proper officer, not below the rank of Joint Co?ioner;ita reasons to believe that- '- _(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in ·hand. or has daiimcl input tax ?dit in excess of .. his entitlement under this Act or has indulged in contravention of any ofthe provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in.the business of transporting goods oran owner or operator of a warehouse or a godown or any other. place is keeping goods whichhave escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may a?thorise in writing any other officer of State.? tp inspect any places of business of the taxable person or the persons enpged in the business of transporting goods or the owner or.the operator of warehouse or godown or any other place. (Z) Where the· proper officer, I10t below the rank of Joint CO!plllissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or. books or thmgs. which ln his opinion shall be useful for or relevant to any proceedings under this Act are secreted in any place, lie may authorise in writing any other officerof State tu to search and seize or may himself search and.seize such goods. documents or books or things: Provided that where itis not practicable to seize any such goods, the proper officer or any officer authorised by him, may serve on the owner or the custodianof the goods an order that he shall not remove, part with, or otherwise.deal with the goods except with the. previouspermission of such officer: PrO\l'ided furtherthat the documents or ·books or things so seized shall·be retained by suchofficer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. Power of . inspem search andseizuft.

(3) l}l.e documents. books or. things referred to in sub- section (2) or . any other .: documents, ?ks or things produced by a taxable pers?Qr any other person, which have not been relied on for the issue of notice under this Act. or the rules made thereunder, shall be returned to such person within a pe!i-Qd not exceeding thirty days ol the issue of the said notice. (4) The officer authorised under sub-section (2) shallhave the power to seal or break open the door of any ptemises or. to break open any almirah; electronic devices, box. receptacle in which any goods, accounts, registers or documents of the person are suspected to beeoncealed, where access to such premises, almi? electronic devices, box or receptacle is denied. · (5) The person from whose. custody any documents are seized under sub-section (2} shallbe entitled to make copies thereof or take titracts therefrom in the presence of an authorised officer at such p1ace an1 time as such officer may indicate ill this behalf?? D.taking_ such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the ?on. (6) The goods so seized und?? .. section (2) . shall be released, on a . provisional b "· upon execution of a bond and furnishing of a seairi.ty, in sudi.manntr and of such quantum, respectively, as may be prescribed oron payment of applicable tax. iμterest and penaltypayable, as the case may be. (7) Where any goods are seized under sub-section (2) and no noticein ·respect thereof.is given within.six months of the seizure ofthe goods, the goods shall he•returned to the person·from whose possesaiontheywere sei7.cd: . Provided that the period of six months may, on sufficient cause being shown, be, extended by the proper officer for a further period not exceeding six months. (8) The Government may, havingregard to the perishable or hazardous nature of any goods, depreciation. in the valueof the goods with the passage of time. constraints of storage space for the goods or any .other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be dJsposed?fby. the proper officer in such manner as may be prescribed.

ofl974 (9) Where any goods. being goods specified under sub- section (8), have been seized by a proper officer or any officer authorised by him. under sub-section (2). he shall ' prepare an inventory' of such goods in such manner as Ibay be prescribed. ? . ......:.-...;:;,,., (10) Toe provisions ofthe Code of Criminal Procedure, 1973, relating to search and seizure, shall, so far as may be, -apply to search and seizure under this section subject to ·. the modification that sub-section (S)of section ofthe saideede shall have effect as if for the word "'Magistrate? w?er it Q(;CUl'S. the word -C.00,IJU88K'Oel'• were substituted. (11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the pay'ment . of any tax. he may. fQr reasons to be recorded in writing. sei7F the accounts. registers. or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act <>r the rules made thereunder for prosecution. (12) The Commissioner or an officer authorised by him may cause pun:hase of. anz.goods or services or both by any person authorised bf him from the business premises of any taxable person. to check issue of tax um>ices or bills of supply by such taxable person. and on mum of goods so purchased by such officer, such taxable person or any person In charge of the business pretnises\shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier. 68. (I) Toe Government may require the person i;n charge of a Inspection of goods i conveyance carrying any consignment of goods of value movanent exceeding such amount as may be specified to . carry with him such documents and such devices as may be prescribed. (2) The details ofdocuments required to be carried under sub-section ( I) shall be validated in such manner as may be prescribed. (3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer. at any place. he may require the person in charge of the said conveyance. to ? thedocuments prescribed under the said sub- . section and devices for verification, and the said person shall be liable to produce the documents and devices and also a.How the inspection of goods.

2afl974 69. ( l) Where •• the, Commissionei: has · reasons to believe Powa- to arrest • . t:h? ?y pe,son ? CQQnitteq, any offence specified ,:lll clause [a) or clause (b) or clause (c) or clause (d) of ,. sμb--semol\,.(l) of section J32which is punishable under cla??i) or O,i) of.sab-section (l}or,sub-secticm (2) of the said section. he may,. by order, authorise any officer of S?1b\X to arrest sucbperson e; ·• (2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of $Cctio11132. the officer authorised to arrest a person shall inform s? person of the grounds· of an-est· and produce· him before a Magistrate within twenty four hours. (3) :Su'6ject1'to) the provisions of the Code of Criminal Procedure.1973,- (a) where a person ls.arrested under sub-section (1) for any offence specified ?9er sub-section { 4) of section 132, heshall be adoiiired to bail or in default of be% ?f\!arded ? the c?!=>41of the Magistrat.e; ,. (b) 'in the case of a non-toglll7.ablt ·and bailable offenct. the Deputy Commissioner or the.Assistant Commissionersruil}. for.the purpose of releasing an arrested person on baihw-otherwise. have the same po??s.J-Od be subj? totlle .. ? pi:ovisions as an o???r .. ?-c.l}9e of ?.policq station ..... • tafl908 70. (1) The prope,;,officer under.this.A? shall have power to summon any person whose1 attendance he considers necessary either to give evidence or to produce a do?tor any other thing in?any inquiry in the same manner;;u provided in the·caseofacivil court under the provisionsoftht-Cbdeof' €i'Yit?edure. 1908. Power to summon persons to give evidence and produce documents. 4Safl860 (2) Every such inquiry referred to in sub-section (1) shall be deemed to be a "judicial proceedings .. within the meaning of section and section228 of the

(5) (1) (2) , (3) (1) (2) 78 Where the registered person isentitledtoa refund consequent to the orderforfinal assessmentunder sub- section (3), subject to the provisions of sub-section (8) ofsection54, interestshallbepaidonsuchrefimdas provided in section56. The proper officer may scrutinizethereturn and related particulars furnished by the registeredperson to verify thecorrectness ofthe returnand informhim ofthe _ discrepancies noticed, if any, in such manneras may be prescribed and seek his explanation thereto. Incasetheexplamflonisfoundacceptabletheregistered person shallbe informed accordingly and nofurther ‘ actionshallbetakeninthisregard.‘ ' In caseno satisfactoryexplanationis firrnishedwithin aperiodofthirtydaysofbeinginformedbytheproper officerorsuchfirrtherperiodasmaybepermittedby himorwhaethemgistaedpersonafieraccepting thedisaepandmfailstotakethecorrectivemeasure inhisreturn forthe'rnonth in whichthediscrepancy is accepted, the proper oilicer may initiate appropriate action including thoseunder section 65 or section660r section67, orproceedtodeterminethetaxandother " duesundersection73orsection74. "Notwithstanding anything to the contrary contained in section73or section 74, where a registeredperson fails tofurnishthe return under section39orsection 45, even after the service ofa noticeundersection 46, the proper officer may proceed to assessthe tax'liability of the said ‘ person tothebestof his judgment taking intoaccount all the relevant material whichisavailableorwhichhe has gathered and issue an assessment order within a period offive years from the date specified undersection 44 for finishing of theannual returnfor thefinancial ’ year to whichthetax nOt paid relates. Wherethe registered person furnishesavalidreturn within thirtydays oftheservice ofthe assessmentorder runder sub- section (1), the said assessmentorder shall " be deemedtohave been withdrawn but theliability for payment ofinterest under sub—section (1) of section 50 orfor payment of late fee under section 47 shallcontinue. Scrutinyofreturns Assessment ofnon-filers ofreturns. 79

Notwithstanding anything to the contrary contained in section 73 or section 74,where a taxable person failsto obtain registration even though liable todo so or whose registration ,, has been cancelled under Subsection-(2) of section 29 but whowasliable topaytax, theprop’er officermayproceedto assess’the tax liability ofsuch taxable person to the best ofhis judgement forthe relevant tax periods and issue an assessment order within a period of five years from the date specified ‘ under section-H for fumishing'ofthe annual return forthe financial year to which the tax not paid relates: ‘ Provided that nosuch assessment order shall be passed withoutgivingthe personanopportunitynfbeingheard. '

(l) The proper officer may. on any evidence showing a . taxhabihtyofapersoncomingtohisnofioewiththe previous permission of Additional Commissioner or Joint Commissioner, proceed to assess.the tax liability of such person to protect the interest of revenue and issue an assessment order, ifhe has suflicient grounds tobelievefliatanydelayindoingsomayadverselyfiafect the interestof revenue: _ - ‘ ’ . Providedthat wiierethe taxable person to whorn the liability pertains is not ascertainableand such liabilitypertains to’supply of goods, the person in chargeof such goods shall be deemed tobe other amount due under this section. the taxable person liable tobe assessed and liableto pay taxand any (2) On an application made by the taxable person within thirty days frbm the dateof receipt. of order passed under sub-section (1) oron his own motion, if the Additional Commissioner or Joint Commissioner considers that 'smhorderisermneoushemaywithdrawsuchorder, and follow the procedure-laiddown in section73 or section